When you start a hosting business you need to carefully consider the prices and plans that you set. There are many web hosting packages provided on the internet. Reading the previous article about Earning Money from Web Hosting will be useful for you to do market research before creating your plan so that you can differentiate your hosting package from the competitors.
Your services offering should be determined by the features, storage, bandwidth, or even support that you would like to provide to your clients. This post will guide you through the process of creating a package and hosting plan, as well as setting pricing.
Hosting Variables
Here are some common hosting variables you will see on hosting plans you should consider:
Defining the Hosting Plans:
Plans should achieve the following:
- Simplify your product and invoice process by having predefined options.
- Maximize revenue by pushing clients further up the package tree and encouraging upgrades
- Including important features in plans that improve client experience
To create a hosting package, you need to understand the market and its needs. Then, identify the price and your profit based on the features or services that you will offer. For example, you can choose to have two different hosting packages: one that comes with website-building tools as part of the service package, and the other that doesn't.
Or you may define based on the resources and the client’s website. Below are the examples:
- Basic package: providing limited resources but enough for starter sites or small websites.
- Intermediate package: a step-up offering more resources, suitable for growing websites or business.
- Advanced package: comprehensive resources and features for larger business or heavy traffic sites.
Make sure clarity in resource allocations such as disk space, bandwidth, email accounts, and many more. This aims to help customers easily choose the best plan for their needs.
Add-ons:
The hosting provider may charge an additional amount to the client, for example, a setup fee (it’s a one-time payment when signing the contract), a domain registration fee, or a cost for managed support - 24/7 support with excellent customer services. In addition, there may be an additional feature to enhance clients’ websites like an extra security feature like SSL certificates which could be included as an additional charge.
You should avoid offering unnecessary features or resources that can increase costs or confuse your customers.
Deciding the Prices:
After you finalize your package, you can set up your pricing based on the value that you’ve stated on the package. Be careful as if you get this wrong your services are unprofitable, and increasing prices later could annoy customers.
When setting the price of your web hosting service, consider the costs of running your web hosting, the value you think you add, and the competitor pricing.
You can always discount pricing also: offering discounts or incentives to increase signup rates is sometimes better than having lower prices to begin with.
Tiered pricing is one value-based pricing strategy that you might implement. Charge gradually more when packaging various levels of service to make a profit on the following value gains. For example;
If you offer shared hosting and resources, charge $2.95. $5.95, and $9.95 per month, respectively. You can offer a 50% discount for the first year, and a free domain name for a year.
If you offer VPS hosting, cloud hosting, or dedicated hosting, you can offer more customized and flexible plans, with different features and resources, and charge according to the usage or demand of your customers.
Those are some of the steps to create a package, price, and plan for a web hosting business. If you are enthusiastic about starting a web hosting business, you can check out our blog series.
